Based on the research done by the Australian Bureau of Statistics, a male born in 2010 to 2012 can expect to live to the age of about 80 years, and a female to about 84 years. Compare this to about 55 and 59 years respectively for 1901 to 1910, and you can see how far we’ve come in a century!
Many of us will live even longer than these average ages. So if you retire at age 65, your retirement savings may need to generate returns to last up to 20 years and beyond.
Your account-based pension may or may not bridge the gap between what you may qualify for through the government Age Pension and the lifestyle you’d like to achieve in retirement.
The Association of Superannuation Funds of Australia (ASFA) Retirement Standard has defined a comfortable retirement lifestyle as enabling an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.
ASFA Retirement Standard assumes that you own your own home and single calculations are based on female figures. Figures shown are budgets for persons aged around 65 years. Different budgets apply for persons aged around 85 years.
According to the (ASFA), a single person needs to spend $42, 861, and a couple $58, 784, a year to live comfortably in retirement².
The table below shows the weekly and annual budget a single person or a couple needs, to fund a modest or comfortable lifestyle in retirement.
The figures in each case assume that the retiree(s) own their own home, are relatively healthy, and relate to expenditure by the household. This can be greater than the household income after tax where there is a drawdown on capital over the period of retirement. All calculations are weekly, unless otherwise stated. Source: ASFA Retirement Standard, June quarter 2015
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